Anna Alferoni, 80, runs the oldest stall in Piazza Navona, site of Rome's most popular Christmas market. This year, she's having trouble selling even relatively inexpensive Nativity scene figurines.

Sylvia PoggioliNPR

A tour of how Christmas shopping is going in Italy starts with Via Condotti — Rome's premier shopping street.

It features high-end stores like Prada, Gucci, Armani, Bulgari, Louis Vuitton, Valentino and Ferragamo. But salespeople are standing idly by the door. There's a yawning emptiness in these shops.

Two streets down, the only Christmas sound is a recording of a children's chorus singing "Gloria in Excelsis Deo." But even in a toy store, well-dressed customers leave without buying.

As Italians look ahead, they see the specter of a deep recession. The government has already imposed new taxes. Businesses are closing, and this holiday season, the prospect of austerity measures worth $40 billion has created a mood of fear and insecurity.

Cutting Back

This atmosphere may explain why Italians aren't buying expensive presents for Christmas. But in a country where fine eating is the national pastime, it's hard to believe Italians would scrimp on traditional Christmas meals.

Yet the fruit and vegetable market at Campo dei Fiori — a Roman food destination — is also hurting.

Stall owner Claudio Zampa, who has a top-class clientele, says business has dropped 50 percent from last year.

"Even my rich clients this year are not spending. They are scared," Zampa says. Then he whispers: "There is that aristocrat — I won't say her name — who owns a car worth 200,000 euros. She actually told me she can't afford a truffle!"

In times of crisis, wealthy people tend to keep a low profile.

This is not a good time to be seen wearing a mink coat or driving a Ferrari, especially in a country with one of the highest tax evasion rates in Europe.

The new government has vowed to crack down on big-time tax cheats, but most ordinary Italians — wage earners and pensioners — say they are the victims of the new budget cuts and tax hikes.

And they're not keeping a low profile.

No Holiday Break For Protesters

This Christmas season, there are strikes almost daily. One day it is transport workers, then bankers, then civil servants, and the list goes on.

At one recent rally, a union leader stirs up the crowd with a list of middle-class grievances and gets a resounding applause.

Francesco Pugliese, CEO of the Conad supermarket chain, says middle-class Italians are suffering the most and have sharply reduced consumption.

"This looks like a postwar economy," Pugliese says. "These last two weeks before Christmas are the worst in 50 years."

Even in Piazza Navona, site of Rome's most popular Christmas market, the mood is glum.

There's none of the traditional holiday bustle at the dozens of stalls selling low-cost trinkets.

Anna Alferoni, 80, proudly runs the oldest stall at the market — it's been in her family since 1820. She sells Nativity scene figurines and creches, but says this is the worst year she's ever seen.

"The crisis is really bad," Alferoni says. "It's hard to sell anything, even figurines for 3 or 4 euros. There simply is no money."

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Transcript

RENEE MONTAGNE, HOST:

One place that has good reason not to be in the spirit of buying this Christmas is Italy. It's ending the year with the specter of a deep recession ahead and dealing with higher taxes and lower pensions. NPR's Sylvia Poggioli reports from Rome. This has created a mood of fear and insecurity this holiday season.

(SOUNDBITE OF STREET NOISE, PEOPLE TALKING)

SYLVIA POGGIOLI, BYLINE: Let's start with Via Condotti. This is Rome's premier shopping street: Prada, Gucci, Armani, Bulgari, Louis Vuitton, Valentino, Ferragamo. The sales people are just sort of standing idly by the door, yawning emptiness in all these shops.

(SOUNDBITE OF KIDS SINGING CAROLS)

POGGIOLI: Two streets down, a recording of a children's chorus is the only Christmassy sound around. But even in this toy store, well dressed customers leave without buying. They may not be buying presents this year but it's hard to believe that in the country where fine eating is the number one national pastime, Italians would scrimp on traditional Christmas meals. Let's check out the fruit and vegetable market at Campo dei Fiori, a Roman food mecca. Claudio Zampa, who has a top-class clientele, says business has dropped 50 percent from last year.

CLAUDIO ZAMPA: (Speaking in Italian)

TRANSLATOR: Even my rich clients this year are not spending. They are scared. There is that aristocrat - I won't say her name - who owns a car worth 200,000 euro. She actually told me she can't afford a truffle.

POGGIOLI: In times of crisis, wealthy people tend to keep a low profile. This is not a good time to be seen wearing a mink coat or driving a Ferrari, especially in a country with one of the highest tax evasion rates in Europe. The new government has vowed to crack down on big-time tax cheats, but most ordinary Italians - wage earners and pensioners - say they are the major victims of the new budget cuts and tax hikes. And they're not keeping a low profile.

(SOUNDBITE OF STRIKE, MAN SPEAKING ON LOUDSPEAKER)

ITALIAN MAN: (Speaking in Italian)

POGGIOLI: This Christmas season, a day doesn't go by without a strike. Transport workers, bankers, civil servants, you name it. At this rally, a union leader stirs up the crowd with a list of middle-class grievances.

(SOUNDBITE OF STRIKE, MAN SPEAKING ON LOUDSPEAKER)

MAN: Francesco Pugliese, CEO of the Conad supermarket chain, says middle-class Italians are suffering the most and have sharply reduced consumption.

FRANCESCO PUGLIESE: (Speaking in Italian)

POGGIOLI: This looks like a postwar economy, he says. These last two weeks before Christmas are the worst in 50 years. Even in Piazza Navona, site of Rome's most popular Christmas market, the mood is glum. There's none of the traditional holiday bustle at the dozens of stalls selling low-cost trinkets.

Eighty-year-old Anna Alferoni proudly runs the oldest stall at the market - it's been in her family since 1820 selling Nativity scenes, figurines and creches. She says this is the worst year she's ever seen.

ANNA ALFERONI: (Speaking in Italian)

POGGIOLI: The crisis is really bad, she says. It's hard to sell anything, even figurines for three or four euros. There simply is no money. Sylvia Poggioli, NPR News, Rome.